Nifty 50 Target: Domestic brokerage Emkay Global Financial Services sees an 11% upside in the Indian stock market benchmark, Nifty 50, pegging the target at 29,000 for next year, driven by consumption boost and monetary easing.
"The GST reforms and structural boost to affordability will help revive consumption and the economy, while RBI’s ‘Do what it takes approach’ will lead to a revival of retail lending," according to analysts.
While cautioning that near-term volatility may persist, Emkay Global notes that the earlier-mentioned catalysts offer a favourable setup for India’s medium-term growth cycle. It expects healthy rainfall to aid income and consumption recovery, supported by an additional tailwind from the FY26 Union Budget tax cuts.
The brokerage believes FY26 and FY27 earnings have bottomed out and are now poised for recovery. With the earnings cuts more muted now, 13% of the consensus universe saw less than 10% EPS downgrade during Jul-Sept 2025, said the brokerage, adding that it foresees larger upgrades for small and mid-cap stocks than for large-cap stocks.
Seshadri Sen, Head of Research & Strategist, Emkay Global, noted, “SMID valuations may appear elevated at first glance, but they remain largely justified given the significant differences in sector composition. Within the segment, we’re also seeing better earnings quality coming through, especially in sectors like Consumer Discretionary, where meaningful opportunities are emerging. On the other hand, we remain underweight on areas dominated by large caps, such as Financials and FMCG.”
Commenting on the flows, Emkay Global expects domestic mutual inflows to remain robust, even as foreign portfolio investors (FPIs) have remained net sellers. So far this year, they have net sold ₹161,630 crore worth of Indian stocks. Meanwhile, the primary market remains active, with the highest-ever fundraising on record.
Sectoral Outlook for 2026
Among the sectoral bets, Emkay is Overweight on Discretionary, Industrials, Healthcare and Materials in 2026, driven by improving demand patterns and structural earnings visibility.
It noted that discretionary is the strongest theme, supported by GST-linked price cuts, urban demand recovery and early signs of improvement in hiring trends.
On the flip side, it remains Underweight on Financials, Staples, IT and Telecom. It notes that financials face continued de-rating pressures for large banks and intensifying competition from PSU lenders and NBFCs. "On the other hand, IT sector, despite being more reasonably valued, is expected to see a sustained recovery by CY26 as global tech spending stabilises," it added.
Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
